Google Commands 28x Forward P/E as Cloud Backlog Hits $462 Billion
Google trades at $402 with a forward P/E of 28x on projected 2026 EPS of $14.22, a 35% premium to its five-year average and above Microsoft (24x), Amazon (31x) and Meta (19x). First-quarter Cloud revenue rose 63% y/y with a $462 billion backlog and 32.9% margins.
1. Elevated Forward P/E
Google shares trade near $402 with a forward P/E of 28x based on $14.22 projected EPS for 2026, reflecting a 35% premium to its five-year historical average as the company is viewed more as an AI infrastructure provider.
2. Peer Valuation Comparison
At 28x, Google's multiple exceeds Microsoft at 24x and Meta Platforms at 19x, and is slightly below Amazon's 31x, highlighting investor willingness to pay up for its AI and Cloud positioning.
3. Cloud Backlog and Revenue Growth
In Q1 2026, Cloud revenue grew 63% year-over-year with operating margins of 32.9%, supported by a $462 billion backlog that secures more than a year of consolidated revenue through multi-year enterprise AI contracts.
4. Depreciation and Capex Risks
Alphabet’s fiscal 2026 capital expenditure guidance of $180–$190 billion for data centers and hardware may trigger a timing mismatch as these outlays are depreciated over three to five years, potentially pressuring net income margins if AI monetization slows.